Consumer credit debt consolidation is a process of combining credit debt so that only one monthly payment is necessary. With most debt consolidation processes, no loan is used. Rather, an individual works with a debt consolidation company, which works with the individual's lenders to reduce payments and interest rates. The consolidation company then collects a monthly payment from the individual, and pays each of the lenders from that single payment.

Debt consolidation is beneficial because it can speed of repayment of borrowed funds, sometimes at a reduced rate. The goal of the credit debt consolidation program is to pay off the debt quickly. To accomplish this, borrowers may pay more out each month than the minimum payment, but in the long term, they are saving money. The money savings may come from reduced interest charges.

Some forms of consumer credit debt consolidation occur through loans. Each of the borrower's loans is paid off using the funds from a new, larger loan. This does not eliminate the debt, but restructures it. It can be difficult to obtain a debt consolidation loan for a person with a low credit score.

Some companies offering consumer credit debt consolidation claim to be able to reduce the amount owed by the borrower. Companies may be able to do this through a working relationship with the lenders. Lenders often agree to this type of consolidated debt because the borrower is struggling to keep up on payments. Fees, interest charges, and sometimes the balance of the loan may be reduced. This happens at the company's discretion.

Consumer credit debt consolidation programs may affect an individual's credit score. If the borrower is not repaying the loan according to the terms of the original agreement, this can cause a negative mark on the credit report. When the debt consolidation is successful, this will be reflected on a credit report with the debt marked as paid. In the short term, it may reduce a credit score, but in the long term, consumer debt consolidation may be better than bankruptcy.

Consumers do need to consider their own debt load and their ability to repay what they owe before considering consumer credit debt consolidation. Those individuals who struggle to pay their debts may benefit the most from debt consolidation. Borrowers who are considering bankruptcy may also benefit if they consolidate debt instead.

Consumers can learn more about consumer credit debt consolidation programs by scheduling a meeting with a debt counselor. This meeting will lay out the possibilities for the borrower, including what the monthly payment may be. The counselor will work with the borrower and their lenders to find a solution that works for both to get the debt repaid.